Autoweb.com, an online buying service, has changed its dealer fees in Texas to settle allegations that it violated a state ban on auto brokering.
The Texas Motor Vehicle Division last year accused Autoweb.com of Santa Clara, Calif., of brokering because it charges dealers a fee for each Internet prospect. Dealers subscribe to Autoweb.com to receive leads from the company's Web site, which enables consumers to request price quotes from dealers.
Instead of charging a fee per referral, Autoweb.com dealers in Texas will pay $10 per month per franchise within an exclusive territory defined by ZIP code. In other states, Autoweb.com will continue to charge $30 per online lead. Texas prohibits buying services from charging dealers transaction fees. The Texas Motor Vehicle Division said a referral fee is a transaction fee because some referrals result in auto sales.
The division threatened to fine dealers who did business with Autoweb.com. As a result, Autoweb.com's Texas dealer clientele dropped to 100 from 130. The buying service has 5,300 dealers nationally.
Autoweb.com officials say the company is seeking auto brokers' licenses in some states, even though it has not run into legal trouble outside of Texas.